High-Impact Entrepreneurship

Join the global conversation


Endeavor Investor Network Convenes Over 120 Entrepreneurs and Investors in NYC

On May 5th, the Endeavor Investor Network convened growth market leaders in New York City for a day of networking and learning. The invitation-only event gathered over 120 participants including Endeavor Entrepreneurs and leading investors […]

May 13th, 2015 — by admin

Read more

In the news

Latin American Venture Capital Fund Kaszek Ventures Raises $135 Million

Kaszek Ventures, run by Endeavor Entrepreneurs Nicolas Szekasy and Hernán Kazah (co-founders of MercadoLibre along with Marcos Galperin) recently raised $135 million in a second round fund. Despite recent headlines discussing the turbulence in emerging markets, the substantial funding round shows […]

February 11th, 2014 — by admin

Read more
Get RSS Feed

New York Times features Endeavor firm Lumni

In a new opinion article on the New York Times blog, “Instead of Student Loans, Investing in Futures,” journalist David Bornstein questions “whether there may be a better way to pay for college than with scholarships, grants, and loans. Is it possible to finance higher education the way we finance startup companies?”

As an example of this approach, he profiles Lumni, a Colombia-based social enterprise run by Endeavor Entrepreneur Felipe Vergara, who was recently named the 2011 Latin American Social Entrepreneur by the World Economic Forum.

Bornstein points out that the organization has raised $17 million to fund the education of students across Latin America (Chile, Colombia, and Mexico) and the United States by offering “human capital contracts.” He uses the example of a Colombian student who, in exchange for his tuition fee of $8,500, agreed to repay Lumni 14 percent of his salary for 118 months after graduation.

Lumni has provided its unique form of financing to 1,900 students. As Bornstein points out, “fifty five percent of them are women and 90 percent are the first in their families to attend college…So far, the default rate is under 3 percent.”

Bornstein argues that Lumni offers a compelling model that, like insurance, spreads the risk among multiple parties while accomplishing steady returns. He concludes: “Economists are skeptical about human capital contracts — which were first proposed by Milton Friedman in the 1950s — because they have many potential problems and little track record. But Lumni seems to be making them work — at least on a small scale.”

“The most important asset in the world is people,” Felipe Vergara is quoted as saying. “But modern society hasn’t organized itself in a way to invest in most people. I like to think of Lumni as a springboard that allows people to pursue their dreams — it offers a way out of a situation where the ceiling is very close to your head.”

Also, check out Bornstein’s follow-up opinion piece which sheds further light on Lumni and human capital contracts, and responds to reader comments.

Inc. profiles Endeavor’s Argentinean Entrepreneurs

In the June issue of Inc. magazine, Max Chafkin writes about Argentina’s enterprising, courageous entrepreneurs. His article, “A Constant Feeling of Crisis,” details how a number of successful entrepreneurs overcame or took advantage of the country’s financial collapse in 2001 through perseverance, intelligence or luck, and how they have persisted despite Argentina’s unpredictability. All of the companies profiled in the piece are Endeavor firms and have benefited from the Endeavor network and expertise as they face a wide range of business hurdles.

As a supplement to the article, below is additional information on the Endeavor Entrepreneurs profiled in the piece and how they have benefited from the network.

When OfficeNet was selected as Endeavor first company in 1998, founders Santiago Bilinkis and Andy Freire had 0% equity in their business. Endeavor’s network of US venture capitalists helped them to negotiate a 35% share. Through this network they were introduced to the then-CEO of Staples, who was a valuable mentor as they grew their business. The sale of OfficeNet to Staples in 2005, referenced in Chafkin’s article, was the result of strong relationships and carefully cultivation. In addition to extensive mentorship on financing, growth, and leadership development, they also benefited from a Global eMBA, Immersion Tour, and Entrepreneur Summit. Freire has gone on to start Axialent, a management consultancy focused on leadership and corporate culture. Andy and Santi serve as chairman and co-chairman of Endeavor Argentina’s country board.

Endeavor Entrepreneur Patricio Fuks, the co-founder of Fën Hotels, is also profiled in the article. Along with Alejandro Frenkel, he brilliantly saw the opportunity that could arise out of the collapse by buying hotels while prices and wages were low, however his company expanded rapidly and Endeavor mentoring helped him create a sound strategy for scaling his business internationally. In addition to local mentorship, namely on HR issues, the Entrepreneurs have benefited from the eMBA program, Summit, and Immersion Tour.

Endeavor Entrepreneur Susana Balbo is an exceptional business woman and has become “the most successful wine entrepreneur in a booming industry.” She has benefited from the Global eMBA and G-Lab programs, Entrepreneur Summit, and introductions to Global Board contacts. Among other local services, she has benefited from high-profile mentors, a European consultant who helped with a Europe strategy, a BID-financed project (with a consultant from DiTella) who developed a financial model, a BCG project on marketing strategy, and introductions to commercial contacts abroad.

Chafkin rightly articulates that “A lack of financing is often seen as a cause of economic stagnation, but in Argentina it’s more a symptom of something graver: persistent uncertainty and instability.” He mentions that nonprofits like Endeavor Argentina help by providing support to entrepreneurs and linking them with more established companies. Congratulations to all Endeavor Entrepreneurs profiled in the feature.

Endeavor Entrepreneur Miguel Santos on Technisys (World Economic Forum report)

In collaboration with Endeavor Global and Stanford University, the World Economic Forum recently released a new report, “Global Entrepreneurship and Successful Growth Strategies of Early-Stage Companies.” Click here to learn more.

The report, which demonstrates the importance of High-Impact Entrepreneurship in driving economies forward, includes interviews and insights from eight Endeavor Entrepreneur companies: DocSolutions, Globant, MercadoLibre, Petfor, Pharmacy 1, Refinancia, Technisys, and Yola.

In this special series on Endeavor’s blog, we are reprinting the published interviews with each Endeavor firm. Below is the section on Technisys.

Technisys was started in 1996 by three co-founders: Miguel Santos (CEO), Adrian Iglesias (COO) and German Pugliese Bassi (EVP). Its focus was Internet banking products for the financial service industry. After initial traction with major signature clients, the Argentinean crisis in 2002 to 2003 left the founders with a company struggling to survive. Since its resurgence in the same industry and product area in 2004, Technisys has continued on a consistently strong and profitable growth path. In 2001, the founders were selected as Endeavor entrepreneurs.

Miguel Santos is the chief executive officer and co-founder of Technisys. Prior to founding the company, Santos worked for the financial services division of IBM. Santos obtained a BS degree and an MS degree in computer science from the University of Buenos Aires. He has also completed post-graduate work in symmetrical process systems, distributed databases and network computing. In March 2001, Santos was selected as an Endeavor entrepreneur. He has chaired seminars on entrepreneurship at New York University and Stanford University and has made presentations at many banking conferences, including BAI, CLAB, Felaban, Febraban and AMBA.

What was the source of the initial idea, and how did that idea evolve into a viable high-growth business venture? How did it change over time?

Santos: “One of the co-founders, who worked for IBM Argentina, was inspired to think of working in his own company rather than for a large company like IBM. I met him while working on a job for the financial division of IBM. Although we observed IBM suppliers making more money than those working directly for IBM, we did not want to set up a supplier company to IBM. Having decided to set up our own company, we next searched for the target market and chose the financial service sector. This was a big stable market in Argentina, and it had a very good track record of paying bills to its vendors on time. In Argentina, this is a big issue in general and is especially important for start-ups. Many vertical companies in Argentina do not have a good reputation for paying on time.

“Finally we decided on the product. We selected e-banking from two other alternatives we considered because we believed that the Internet would radically transform the way consumers access financial services. And it did. This idea evolved over time. Around 2002, the company started to explore new banking applications for web-based technologies such as branch automation, self-service kiosks, ATMs and web call centres. In 2006, with the introduction of new related architectures such as service-oriented architecture (SOA), the company transformed its product offering into an integrated multi-channel banking suite, which solved quite nicely the channel integration problem. In 2008, while mastering SOA, Technisys entered the core banking arena, starting to develop Cyberbank Core, a new generation, process oriented, multi-channel, multicurrency, multi-bank, fully SOA-based, core banking system.”

What was the initial growth vision or aspiration of the founding team? Was there a sizeable change in this growth vision or aspiration over time? If a change, please describe.

Santos: “We had big aspirations from the start. We didn’t set any limits. We wanted to be Bill Gates or Steve Jobs. At the same time, however, we had little experience in building a company from the start. Our confidence and aspirations were reinforced when Deutsche Bank became our first customer in 1996. We launched a pilot Internet banking project for Deutsche Bank in Argentina, which was one of the earliest e-banking initiatives in Latin America.”

Describe the strategy or business model that enabled your company to achieve its high rate of growth.

Santos: “The company combines the sale of software licenses with related recurrent services to generate a robust income model. Each contract sale produces up to five revenue components, including a one-time license and customization services, a recurrent license maintenance fee, and technical support services. It is also important to note that we’ve decided to grow through geographical expansion versus the option of expanding into other industries, helping us to scale the business better. The next step in a high rate of growth is yet to be seen because the product is reaching critical mass in the market, thus attracting interest from integrators and resellers such as Accenture, Bull, Sonda and TCS. We think this indirect sales model will allow us to scale up revenues dramatically in the coming years.”

What were the major growth accelerators for your company in its high-growth years?

Santos: “Some key growth accelerators in the early days:
1. Our ability to sell things that did not yet exist. We used prototypes to show potential customers what the product might look like.
2. Innovative products. This was a big factor from the very beginning. As industry specialists, we work hard to anticipate demand and fulfill our customers’ needs on time.
3. Early signature customer wins. Our first customer was no less than Deutsche Bank Argentina, which had many benefits because it was a major lighthouse customer. We also benefited greatly from the rigorous due diligence that Deutsche Bank of New York required us to go through as part of the bidding process. We had never done this before, and it gave us much more industrial strength. It was our first encounter with an excellent and demanding client.
4. Exploitation of the company’s successful track record. We did this first with Deutsche Bank and then with major brands like Citibank and HSBC.
5. Our ability to hire really good technical people. We were technical people ourselves, so we had a good sense of who was AAA and who was not. In contrast, we were not as good at hiring business people, and this hurt the company.
6. Becoming an Endeavor entrepreneur. This had a deep impact because it opened our mind to a broader set of opportunities to manage the business and grow. One key area was financing, where we became much more aware of and open to outside investment funding. It was not just reading the Endeavor entrepreneur stories, but also the ability to meet other entrepreneurs and exchange ideas. It was very inspiring for us.”

Briefly describe the financing of your company and how this financing impacted the growth of your company.

Santos: “We were a bootstrapped company until 2007. There was effectively no venture capital market in Argentina, and even if there had been, we likely would not have known about it. We were totally focused on developing products and linking up with customers. We had to grow organically from the living room of one of the founders, with a couple of old PCs, cooking our own lunch each day. During the early years of progress (1999 to 2001), we had some accounts with very good margins, and we built up a cash reserve. This cash proved a great buffer when the crisis hit us in 2002. But then in 2003, we needed to fund the company from our own savings. Not only were we not drawing salaries, but we were putting more of our own money into the company. You can do that for two to three months, but then you wonder whether this is a hole that will keep getting bigger. Luckily, the company had resurgence in 2004 and returned to profitability.”

What were the major challenges your company had to handle in its high-growth years, and how were they managed?

Santos: “These include:
1. Scalability challenges. The major growth challenge for us still is to implement business processes that guarantee that every single person in the company shares the company’s values, vision, objectives and culture. Scalability is the key.
2. Attracting and retaining talented people. We are better at this for technical people than for business people. For technical people, we work on selling their projects and also on constantly motivating them with new challenges and better working conditions. We failed big time on one of our first senior management hires. In 2002, we hired our first commercial manager, who came from a major global tech- nology company. Great resume. He did not understand and did not want to understand our start-up culture. He expected a lot of people to be working for him. In our company, this just does not happen. We expected him to add value, and he did not. We learned that a hiring with a bad outcome cannot only freeze you but set you back.
3. International expansion. Building out the international dimension of Technisys is still in its early days.”

Give examples of dark moments or negative periods that your company or you faced as part of your journey as an executive with this company.

Santos: “Definitely the 2001 to 2003 period associated with the Argentinean crisis, where we almost gave up, was a dark moment. NASDAQ’s blow-up and the Argentinean crisis, one after the other, lost us contracts, gave us an empty pipeline and produced sad faces all over. We quickly realized that with a very unstable economy, a non-existent VC industry, and a small local market, we were probably born in the wrong country.

“Being forced to lay off good, committed people was without a doubt the worst feeling I’ve ever experienced at Technisys. I had never done layoffs before, except for an isolated person with a bad attitude or a non-performer. Here I was laying off 20% or more of our people, even though they had good attitudes and good performance records. That was really tough. At first some of those who remained felt some guilt about being kept or felt insecure, worrying ‘am I next?’ But luckily we had some good events that helped rebuild the morale, including being able to hire back some of those we had previously let go. “At some points in 2002 and 2003, we nearly ended the game. But then we saw that we had a good product, some good customers and some good employees, so we decided to continue on.”

What are the key lessons about entrepreneurship and successful growth strategies you’ve taken from your company experience?

1. “Think big. You will use all of your time, so it had better be worth the effort.
2. Go for a big market. That way, there are no natural limits to your company’s growth.
3. People are so important. Take your time to select your partners, investors and employees.
4. Build a scalable business model from the very beginning. Processes, processes and more processes.
5. Commit to your clients. Commit to their businesses, and establish
long-term relationships. If you can help them once, they will buy again.”

Experts offer tips on sales and building a company culture, at London selection panel

In conjunction with the 39th International Selection Panel (ISP) held in London last week, Endeavor hosted a Candidate Day Program at Canning House. Almost all of the ISP entrepreneur candidates were in attendance, along with several Endeavor Entrepreneurs. In reflecting on the “super-interactive” sessions, one of the Latin American candidates noted, “Regardless of what happens on the panel, these two workshops alone made my trip to London totally worth it!”

The day was split into two sessions. The first was led by serial entrepreneur Kenneth P. Morse, who is the Founding Managing Director of the MIT Entrepreneurship Center. His presentation, “Sales and Sales Management: Outline of a Discussion with the Endeavor Teams,” focused on the importance of sales and delivered these main points:

– The CEO must buy into the critical role of sales and be the top salesperson. Believing you have an amazing product that will sell itself will not work, you need to be customer-oriented and appeal to what they think they need, their growth strategy, and financial circumstances
– Sales is a science, not an art, and can be taught
– Calculate and quantify the economic benefits, returns on investment, and value proposition
– Relationships are important — shared meals, common backgrounds
– Craft a divine elevator speech (55 minutes is best)

The afternoon session was led by Niko Canner, a Senior Partner in Booz & Company’s organization and change leadership practice, and a member of the North America Management Team. Niko’s presentation “Building a Culture to Achieve and Sustain Leading Performance” articulated the benefits of targeting your area of focus to where you can win — choosing the “right fights.” He also discussed the importance developing the right culture for your organization to operate at the optimal level. His takeaway points were:

– Build strategy around where your company significantly and sustainably excel
– Know the behaviors that make a difference, and shape your DNA to support them
– Focus deeply on how you and the other people who matter most can get better at the things that matter as rapidly as possible

Endeavor Entrepreneurs speak at BNP Paribas / L’Atelier innovation conference in Paris

On Friday May 20, following Endeavor’s International Selection Panel in London, BNP Paribas and L’Atelier, an incubator with the European bank, hosted a conference focused on creating and funding startups both in France and abroad. BNP Paribas’ clients are increasingly interested in the innovation taking place around the world for the purposes of investment, acquisition, strategic partnerships, and expansion. The afternoon session was devoted to Endeavor.

After a gracious introduction by the president of BNP Paribas, Allen Taylor and Karen Martell, both based in Endeavor’s San Francisco office, kicked off the session by presenting Endeavor’s model, history, and the programs and services Endeavor offers to its 603 entrepreneurs in 11 countries. Then six Endeavor Entrepreneurs presented their companies and their experience as high-impact entrepreneurs in emerging markets. The companies include:

APPI – Alexandre Pi (Brazil): POS payment systems
PozitronFirat Isbecer (Turkey): mobile apps e-commerce, payment, and remote access
GlobantGuibert Englebienne (Argentina): IT, gaming, mobile, and innovation off-shoring company
Colaboracion VirtualErik Torreiter (Chile): videoconferencing solution
Nada Debs Nada Debs (Lebanon): furniture and home accessory designer
ProteusMarcelo Romcy (Brazil): e-security company

The conference and the Entrepreneurs themselves attracted considerable media attention. In addition to journalists directly covering the event and interviewing Endeavor staff, Entrepreneurs Florence Martin, Erik Torreiter and Firat Isbecer participated in interviews which were then broadcast on France’s most popular radio station. Coupled with investor interest in innovation, the conference participants were excited about Endeavor’s exploration of Eastern and Central Europe as potential expansion targets.

London’s Canning House hosts “Innovation and Entrepreneurship in Latin America”

By Karen Martell, Endeavor, Entrepreneur Services & Partnerships

On May 17, during Endeavor’s International Selection Panel in London, the London-based NGO Canning House — which seeks to link the UK to Latin America and Iberia — hosted a discussion titled “Innovation and Entrepreneurship in Latin America.”

Alejandro Mashad, Managing Director of Endeavor Argentina, began the session by presenting Endeavor’s model, history, and experience working with over 400 entrepreneurs from 250+ companies in Latin America since 1998. From there, he introduced two Endeavor Entrepreneurs to present their companies and to share their insights regarding the challenges and opportunities that present entrepreneurs in emerging markets.

Guibert Englebienne, co-founder of Globant, explained how he started his successful global IT off-shoring company during Argentina’s worst economic crisis to date, and how through innovative work environments, crowdsourcing, and unheard-of organizational models, Globant is now serving clients such as Google, Disney, and Nike, and has turned Argentina into a high-tech hub.

Marcelo Romcy, co-founder of Brazilian e-security firm Proteus, demonstrated how a hacker taps into confidential corporate information and explained how his technology uniquely addresses this problem for clients worldwide, ranging from Latin America to the Middle East.

Erkko Autio, an entrepreneurship professor at the Imperial College of London, finished the discussion with some insights on the state of innovation and entrepreneurship in Latin America in comparison to other parts of the world.

As the International Selection Panel itself marked Endeavor’s first major event in Europe, it was encouraging to witness the level of interest and commitment to emerging markets by the nearly 100 people in attendance, twice of what was expected. Given Canning House’s focus on Latin America, they hope to work in close collaboration with Endeavor in the future.

Endeavor Entrepreneur Carlo Gonzaga on his unique franchising business in South Africa

South Africa’s MoneyWeb caught up with Endeavor Entrepreneur Carlo Gonzaga in May 2011 to discuss optimistic 2011 growth for his company, Taste Holdings, his approach to competitors, and several best practices behind his high-impact enterprise and again in July 2011 to discuss the company’s switch to South Africa’s primary stock exchange. The company reported a modest increase in earnings to over $2.5 million in the year to February, and announced a new maiden share dividend. Click here to listen to the podcast and read the interview transcript from May; click here to listen to the podcast and read the interview transcript from July.

Taste Holdings, which began as a restaurant franchising company, now franchises Scooters Pizza, St. Elmo’s and Maxi’s Grill trademarks, as well as NWJ Jewelers. In looking forward to the next year or two, Carlo says, “The real focus is on building our portfolio of brands, as well as building the backend engine that drives our food division. So, we can get the food division to start looking like our jewellery division in terms of its level of integration…increasing our share of manufacturing, going into warehousing and distribution.” While they make 40% of the jewelry that they sell — an advantage over competitors — they are just beginning to vertically integrate in their food division.

In discussing Taste Holdings’ management, and what advantages the company has over bigger competitors, Carlo remains a champion for entrepreneurship. “We’re a lot smaller, we’re a lot less corporate, [and] we like the idea of keeping entrepreneurs involved. I often say that I’d prefer to have a slightly dysfunctional board, in terms of having a bunch of entrepreneurs screaming and shouting at each other because that’s just how they’ve come up, than having managers run a business.”

Most recently, Taste Holdings’ growth allowed it to fulfill a long-held ambition and move from the AltX alternative exchange to list on the Johannesburg Stock Exchange. The company was listed on the AltX, an incubator exchange for promising small and medium sized businesses, for slightly over five years.

When asked about plans to expand into additional brands or another industry, Carlo said it isn’t out of the question, but that Taste Holdings is focusing on existing investments for the next two years. His sentiment regarding international expansion is similar; Taste isn’t actively expanding, but is open to being approached by potential international franchisees.

Endeavor Entrepreneur Marcos Galperin on MercadoLibre (World Economic Forum report)

In collaboration with Endeavor Global and Stanford University, the World Economic Forum recently released a new report, “Global Entrepreneurship and Successful Growth Strategies of Early-Stage Companies.” Click here to learn more.

The report, which demonstrates the importance of High-Impact Entrepreneurship in driving economies forward, includes interviews and insights from eight Endeavor Entrepreneur companies: DocSolutions, Globant, MercadoLibre, Petfor, Pharmacy 1, Refinancia, Technisys, and Yola.

In this special series on Endeavor’s blog, we are reprinting the published interviews with each Endeavor firm. Below is the section on MercadoLibre.

MercadoLibre, Inc. is Latin America’s leading e-commerce technology company. Through its primary forms, MercadoLibre.com and MercadoPago.com, it provides online solutions to individuals and companies buying, selling, paying and advertising on the Internet. MercadoLibre.com serves millions of users and creates a market for a wide variety of goods and services in an easy, safe and efficient way. The site is among the top 50 in the world for number of page views and is the leading retail platform in unique visitors in each country where it operates, according to metrics provided by comScore Networks. MercadoLibre maintains market leadership in 12 Latin American countries and has recently launched operations in Portugal. The company, listed on NASDAQ following its initial public offering in 2007, was named one of the “30 World’s Hottest Brands” by Ad Age magazine and one of 27 “Great Brands of Tomorrow” by the Credit Suisse Research Institute. MercadoLibre became an Endeavor company in 1999.

MercadoLibre’s management today is very similar to that of day one. Founder Marcos Galperin continues in the role of chief executive officer, while CFO Hernán Kazah and COO Stelleo Tolda lead a group of executives that also composed the original management team. Galperin has an MBA from Stanford University and an undergraduate degree from Wharton. While taking a Finance class at Stanford, Galperin asked one of the guest speakers (John Muse of the private equity firm Hicks Muse Tate & Furst) if he could drive him to the airport. After some “fast talking and slow driving,” Muse expressed an interest to invest (and did invest) in what became MercadoLibre before boarding the plane. Galperin is the winner of multiple awards for entrepreneurship.

What was the source of the initial idea, and how did that idea evolve into a viable high-growth business venture? How did it change over time?

Galperin: “While I was studying at Stanford University, I researched several business models related to the Internet and I decided to build a company which could offer an Internet auctions platform to try to solve retail inefficiencies in Latin America. This is a continent where only large cities have good retail alternatives, while other regions remain isolated in this sense. When I returned to Argentina after receiving my MBA, I bought the necessary start-up technology and immediately launched MercadoLibre in all major Latin American countries. The company first offered an auctions marketplace, but quickly converted to an e-commerce platform as users showed their preference for a ‘fixed-price’ model. Through the years we developed new and complementary business units that allow the company to address a wide range of different user needs through an online payments platform, advertising solutions and a new website-building service geared towards our more developed sellers.”

What was the initial growth vision or aspiration of the founding team? Was there a sizeable change in this growth vision or aspiration over time? If a change, please describe.

Galperin: “During the first years, we focused on building a successful company by offering an auctions service through our website. Our main goal was to create a long-term company operating with an innovative philosophy, and relying on technology to change the lives of millions of buyers and sellers in Latin America. However, growth took longer than expected to materialize. In 1999, the Internet only reached 2% of the general population in Latin America, and only 10% of those engaged in some form of e-commerce. With the region undergoing an economic crisis, secular Internet trends grew at a slower pace than originally forecast.
Tracking Trends: Over time, secular trends began to reflect the serious growth potential we had anticipated from the start. In the meantime, the business matured into a wide range of e-commerce services and ever- improving technologies for the use of our clients. The goal was to capture an increasingly larger share of all e-commerce activity occurring in the region. This meant improving MercadoLibre, our online marketplace, as well as the MercadoPago payments business unit, MercadoClics advertising group, and MercadoShops e-building solutions, respectively.”

Describe the strategy or business model that enabled your company to achieve its high rate of growth.

Galperin: “MercadoLibre Inc. is an e-commerce enabler whose mission is to build the necessary online and technology tools to allow practically anyone to efficiently trade almost anything in the Latin American market. The company operates in several reporting segments. The MercadoLibre online marketplace segments include Brazil, Argentina, Mexico, Venezuela and other countries (Chile, Colombia, Costa Rica, Dominican Republic, Ecuador, Panama, Peru, Portugal and Uruguay). The MercadoPago regional online payments platform is available in Brazil, Argentina, Mexico and other countries (Chile, Colombia, and Venezuela). The company attracts buyers by offering choice, value, convenience and entertainment. Sellers are drawn by access to broad markets and efficient marketing and distribution costs that help increase sales and maximize profits.

Integrated IT Platform: The company pioneered regional online commerce by developing a web-based marketplace in which buyers and sellers are brought together to browse, buy and sell items such as computers, electronics, collectibles, automobiles, clothing and a host of practical and miscellaneous items. The trading platform is a fully automated, topically arranged, intuitive, and easy-to-use online service that is available 24 hours a day, seven days a week. The platform supports a fixed-price format where sellers and buyers trade items at a cost established by sellers, and an auction format in which sellers list items for sale and buyers bid on them. Providing more efficient and effective payment methods from buyers to sellers is essential to create a faster, easier and safer online commerce experience. Traditional payment methods such as bank deposits and cash-on-delivery present various obstacles to the online commerce experience, including lengthy processing time, inconvenience and high costs. The company addressed this problem through the introduction in 2004 of MercadoPago, an integrated online payments solution that has enjoyed consistent growth. MercadoPago was designed to facilitate transactions on the MercadoLibre marketplace site by providing an escrow mechanism that enables users to securely, easily and promptly send and receive online payments.

Payment Flexibility: An online classifieds service was also launched in 2004 for sale and purchase of motor vehicles, vessels and aircrafts. Buyers can search by make, model, year and price, and sellers can list their phone numbers and receive prospective buyers’ e-mail addresses on a platform that allows instant and direct communication between sellers and potential buyers. During 2007, the company launched a newand improved version of its MercadoPago payments platform in Chile and Colombia, and expanded it to Argentina during 2008. The new MercadoPago, in addition to improving the ease of use and efficiency of marketplace purchases, also allows for payments outside of a region. Users are able to transfer money to other MercadoPago accounts and to incorporate the technology in their independent commerce websites.

System Updates: MercadoPago 3.0 is designed to meet the growing demand for Internet-based payment systems in Latin America. In December 2009, the company started beta testing processing off-MercadoLibre transactions at selected sites in Brazil using its new direct payments product while maintaining the escrow product for on-MercadoLibre transactions. On 30 March 2010, the company started processing off-MercadoLibre transactions through its new direct payments product to any site in Brazil that wants to adopt it, and on 16 July 2010, MercadoPago 3.0 was launched in Brazil for all its marketplace transactions.”

What were the major growth accelerators for your company in its high-growth years?

Galperin: “The culture and philosophy of the company that enables MercadoLibre to build and maintain a world class team over time results from these major factors:
1. Consistently solid execution of our business plan.
2. The acquisition of several e-commerce companies in Brazil during the first years of MercadoLibre.
3. The launch of MercadoPago that enabled payments through MercadoLibre and other channels. 4. Internet secular trends (broadband penetration, PCs per household and mobile penetration) growing at double-digit rates. 5. Constant focus on upgrading the online platform to improve user experience.”

Briefly describe the financing of your company and how this financing impacted the growth of your company.

Galperin: “We received two rounds of financing in addition to our initial seed funding. The first round, carried out in November of 1999, raised US$ 7.6 million from investors that included J.P. Morgan Partners BHCA L.P., Flatiron Fund entities and Hicks Muse Tate & Furst. The second round of financing was in May of 2000 and raised US$ 46.7 million from, among others, Goldman Sachs entities (GS Capital Partners III, L.P., GS Capital Partners III Offshore, L.P. and Goldman Sachs & Co. Verwaltungs GmbH), Capital Riesgo Internet SCR S.A. (CRI Banco Santander Central Hispano) and GE Capital Equity Investments, Inc.
Strategic Alliances: In September of 2001, we entered into a strategic alliance with eBay, which became one of our stockholders and started working with us to better serve the Latin American online trading community. As part of this pact, we acquired eBay’s Brazilian subsidiary at the time, iBazar, and eBay agreed not to compete with us in the region during the term of the agreement. This agreement also gave us access to certain know how and experience that accelerated aspects of our development. In August 2007, the company successfully completed its initial public offering, resulting in net proceeds of approximately US$ 49 million. With these proceeds, the company acquired TuCarro in January 2008 and the remainder of DeRemate in September 2008.”

What were the major challenges your company had to handle in its high-growth years, and how were they managed?

Galperin: “I would highlight the following steps for handling growth:
1. Build a team and retain talent: We’ve been able to do this by seeking out gifted people motivated by technology and by the enormous growth opportunity we offer. Their commitment is a key element driving our growth, which in turn translates to career advancement and opportunities going forward.
2. Obtain financing: Obviously, we’ve been greatly favoured by the depth and long-term vision of our investors as previously discussed.
3. Develop the technology: Constantly update and improve user- friendly IT tools for speed and capacity to retain customers and grow the company.
4. Face competition. A first mover advantage is obviously huge in this market and we continue to move first into new and subsidiary businesses deals by carefully observing changing trends and their impact on our product. We offer the best service available and then improve it constantly. This obviously implies monitoring competition and being critical of our marketplace by constantly
testing the user experience.
5. Launch new sources of income.
6. Improve the online products and user experience.”

Give examples of dark moments or negative periods that your company or you faced as part of your journey as an executive with this company.

Galperin: “The darkest moment we had to face was when the NASDAQ crashed while we were negotiating our second round of financing. They were moments of great concern and tension because we needed capital to continue operating and many investors wanted to close the company. Fortunately, we were able to convince them about the business potential of the region and this business model, and we could finally close a very successful second round.”

What are the key lessons about entrepreneurship and successful growth strategies you’ve taken from your company experience?

Galperin: “The key takeaways from my entrepreneurial experience would be:
1. Stay focused on the long term and practice patience
2. Deliver the best possible experience and product to your customers
3. Include local managers in each country
4. Select thoughtful investors and business partners
5. Think big and execute.”

23 new High-Impact Entrepreneurs selected at London International Selection Panel

Endeavor invited 23 High-Impact Entrepreneurs representing 13 companies from Argentina, Brazil, Egypt, Jordan, Lebanon, Mexico, Turkey and Uruguay to join the organization at our 39th International Selection Panel, which was held from May 17th-19th in London, England. Endeavor now supports 603 High-Impact Entrepreneurs from 385 companies in 11 emerging market countries.

“Bringing these events to London and Europe was a major step towards increasing the profile of Endeavor and our High-Impact model in the world’s global financial center,” said Endeavor Co-founder and CEO Linda Rottenberg. “The High-Impact Entrepreneurs we selected are the role models who are creating high-value jobs and building sustained support for entrepreneurship in their home countries from Latin America to the MENA region. I’m particularly encouraged by the selection of Endeavor’s first two companies from our new affiliate in Lebanon.”

The International Selection Panel is the culmination of a rigorous multi-step Search & Selection process in which top local and international business leaders interview and offer guidance to entrepreneur candidates. At the International Panel in London, participating panelists came from Brazil, Chile, Jordan, Switzerland, the United Arab Emirates, the UK, and the US. The Panel was supported by a number of corporate sponsors including Abraai Capital, Barclays Capital, Citi Private bank EMEA and Ernst & Young. Endeavor Entrepreneurs were also showcased at two public events immediately before and after the Panel, one at London’s Canning House, the other at the Atelier of BNP Paribas in Paris, France.

Entrepreneur(s)/Companies selected:


Entrepreneurs: Gaston Lejtman and German Dyzenchauz
Description: Integro provides loyalty marketing programs to more than 250 corporations in 10 countries throughout Latin America – including Citibank, Hewlett Packard, HSBC, IBM, P&G and Walmart – reaching 700,000 employees and 20 million customers.


Akiyama Solucoes Tecnologicas
Entrepreneur: Ismael Akiyama
Description: Akiyama is the fastest growing Brazilian biometrics company and the exclusive distributor for three of Brazil’s leading suppliers of electronic components. The company provides solutions for civil identification, manufacturers and integrators, industrial and logistics automation, printers and programmable modules.

Aorta Entretenimento Ltda
Entrepreneurs: Antonio Carlos Soares, Patrick Lisbona, Gustavo Ziller
Description: Aorta is the leading supplier of apps and mobile marketing solutions for businesses in Brazil seeking to reach customers through smartphones and tablets.

Integra Medical
Entrepreneurs: Luciana Guimaraes and Vanessa Vazquez
Description: Integra helps over 40,000 patients manage treatments for chronic diseases through print and digital resources as well as personal guidance from health care practitioners (doctors, nurses and psychologists) who monitor their treatment.


Delicious Bakery (The Bakery Shop)
Entrepreneurs: Tarek El Nazer, Basel Mashhour, Sameh El Sadat
Description: DB is the first commercial baker in Egypt to target retail stores, supermarkets and restaurant chains using a par-baking and frozen delivery system.


Amman Pharmaceutical Industries (API)
Entrepreneur: Fadi Al-Atrash
Description: API is a leading regional manufacturer of niche branded generics, including eye drops, ointments, nasal sprays and topical preparations.


East & East (Nada Debs)
Entrepreneur: Nada Debs
Description: Manufactured by a network of 150 artisans in Lebanon, Nada Debs’ furniture is displayed in top stores worldwide, including in London, New York, Dubai and Cairo. Custom clients have included the World Economic Forum, the Jordanian royal family and the Ritz-Carlton in Bahrain.

Eastline Marketing (ELM)
Entrepreneurs: Marc Dfouni and Nemr Nicolas Badine
Description: ELM provides digital marketing services to regional clients in the Middle East (including Bank Audi, DHL, Kimberly-Clark and Toyota) using a proprietary database of insights into customer segments that cuts across regional geographies and industries.


Entrepreneur: Patrick Struebi
Description: Fairtrasa is a fair trade and organic produce company that works with over 300 small, marginalized farmers in Mexico and additional 700 in other emerging economies to produce and distribute high-quality fruits, vegetables, wine and spices.

Entrepreneurs: Pedro Zarur and Armando Tortoledo Uriarte
Description: Gruindag is a Mexican company that develops and manufactures specialized agro-chemicals and other chemical products for Mexico’s export-oriented farmers and water, paper and leather treatment facilities.


Entrepreneur: Emre Aydin
Description: Already Turkey’s largest online flower store, Ciceksepeti is expanding into a category leader covering all types of gifts and gourmet food packages. They have added high-quality chocolates, and edible fruit arrangements to their offerings.

Entrepreneurs: Hasan Obuz, Mehtap Obuz
Description: The brother/sister team behind Ilio has moved from earlier success in the interior design business (Demirden) into a scalable design brand (Ilio) that focuses on innovative housewares and tabletop products sold worldwide through outlets including Gilt Groupe, Amazon and New York’s Museum of Modern Art.


Salado Media
Entrepreneurs: Andres Ameglio, Carlos Ameglio
Description: Brothers Andres and Carlos Ameglio have become leaders in producing award-winning TV commercials across the Spanish-speaking world for leading global clients including Coca Cola, TNT and Toyota. Their business is at the heart of an emerging AV production eco-system based in Uruguay but that extends throughout Latin America.

Endeavor Entrepreneur Semih Yuzen on Petfor (World Economic Forum report)

In collaboration with Endeavor Global and Stanford University, the World Economic Forum recently released a new report, “Global Entrepreneurship and Successful Growth Strategies of Early-Stage Companies.” Click here to learn more.

The report, which demonstrates the importance of High-Impact Entrepreneurship in driving economies forward, includes interviews and insights from eight Endeavor Entrepreneur companies: DocSolutions, Globant, MercadoLibre, Petfor, Pharmacy 1, Refinancia, Technisys, and Yola.

In this special series on Endeavor’s blog, we are reprinting the published interviews with each Endeavor firm. Below is the section on Petfor.

Petfor is a Turkish recycling company whose major activity is the recycling of PET, a commonly used consumer plastic. Semih Yuzen, who had worked at his family business (Yalteks) where he experienced shortages of polyester raw material, started Petfor in 2004. Recycled post-consumed PET bottles can be used to produce polyester. Yuzen spent time in Italy studying the recycling business prior to establishing Petfor. Operations began in 2004 with a state-of-the-art plant that recycles plastic bottles and produces high-grade PET flakes. The PET flakes are cleaned and the recovered material used to produce plastic bottles. Yuzen became an Endeavor entrepreneur in 2006.

Semih Yuzen was born in Istanbul in 1970. He was 16 years old when he entered Istanbul University, and was one of the youngest graduates when he received his degree in business administration in 1990. He graduated from Pepperdine University in 1994, and worked at Yalteks between 1994 and 2001 as export and import manager. He took a year off in 2002 and travelled to Italy, and decided to establish Petfor in 2003. Money was raised through a bank. His father was the guarantor and all of the US$ 4 million loan was paid back 100% by 2009. Both his father and brother are chemical engineers. His brother lives in New York and his father has an asphalt processing business that supplies modified asphalt to the major road contractors in Turkey.

What was the source of the initial idea, and how did that idea evolve into a viable high-growth business venture? How did it change over time?

Yuzen: “I came back to Turkey after getting my MBA in the US in 1994 to work for the family company, Yalteks, which was already being run by my brother for three years. Although I was a 50% owner of Yalteks, I never thought it was mine and had to work as export/import manager for seven years. We had different ideas about running the company. Since he was the older and the more experienced one, I had to respect and continue working under him. We had to fight during the day and went out for drinking after work since we were (and still are) also best friends. It was really a strange and very difficult process. At that time, I was 24 years old and he was 30. We also had to fight against our father over business matters. He also had different ideas about how to run the business. We always managed to unite against him and that also brought us closer. The cash flow was always the issue. I was responsible for getting the raw material ready on time for production. I had to practice and learn the just-in-time concept. That helped me a lot, being able to run a business without money. At that time Yalteks had to import over 70% of its raw material from abroad and the most critical one was polyester felt, which was used as reinforcement in our products. Polyester felt is produced by 100% recycled post-consumed PET bottles and we were importing it from Italy, France and Holland. In 2001, we decided to run Yalteks differently and we let our production manager run the business. I took a year off and went to Italy to study Italian and recycling, and my brother decided to move to New York to open up a restaurant. In 2004, Petfor was up and running. The idea was to export PET flakes, which eventually would come back to Yalteks as polyester felt. At that time, we always dreamed about producing polyester felt one day using 100% Petfor’s flakes.”

What was the initial growth vision or aspiration of the founding team? Was there a sizeable change in this growth vision or aspiration over time? If a change, please describe.

Yuzen: “I always tried to keep it small and simple and looked for the talent inside Petfor. When this was not possible I brought in people. Pushing people to the limit and empowering them at the same time ensured loyalty. There has not been a sizeable change. Keep it small, efficient and under control. That is, I believe, the best method available. We are facing fierce competition and the learning curve is much shorter for them. As I previously mentioned, selling is not an issue. However, supplying enough PET and maintaining the quality is. For this reason we are bringing people from outside and increasing the number of people in production and quality control. We now concentrate on using existing personnel for getting enough bottles. We are opening new collection centres in various parts of the country; otherwise we will face a PET bottle shortage once we install the new line and double the capacity.”

Describe the strategy or business model that enabled your company to achieve its high rate of growth.

Yuzen: “Quality was the key to our success and still is. During the crisis, we were able to keep our customers with a higher rate of profitability. The margins were almost doubled because of the lower cost of input (PET bottles). We kept investing in new technology and that saved us during difficult times. We had an edge over our competition and Petfor remained as the benchmark for our industry. We also responded promptly to the claims of our clients. We always tried to come up with a solution that is the most convenient for them and they kept coming back.”

What were the major growth accelerators for your company in its high growth years?

Yuzen: “Again, quality, new technology and availability. We are always available and reachable not only by our clients but also by our suppliers. That is very important during difficult times.
“Other than quality, it was the freedom to make mistakes and learn from them. My father helped me a lot and gave me breathing space. Although I was only six months behind my initial business plan and break-even point, his support enabled me to concentrate on quality and establishing good relationships with my clients.”

Briefly describe the financing of your company and how this financing impacted the growth of your company.

Yuzen: “Family and the banks. Thanks to the family financing we were able to maintain high growth and profitability initially. That helped me taking risks.
“My cash flow was never in place despite the profitability. We were making enough money to pay the bills, however we had no bottles in stock. There were days when we were not able to produce due to bottle shortages. We were utilizing only 20% of our capacity. It was enough to keep going but not enough to grow. Because in recycling, you have to scale it to make it meaningful and really profitable.”

What were the major challenges your company had to handle in its high-growth years, and how were they managed?

Yuzen: “Recycling is a very difficult industry and requires a lot of working capital especially at the beginning. The answer to that is hands-on management. I still have my book open and I calculate the cost every single day (the price of what people eat, etc.) In the first three years, I was the first one to arrive in the factory and the last one to leave at night. I paid the salaries after shaking hands and thanking my workers personally during the first three years. That was also the case for our suppliers.

“Becoming a dependable supplier to the major European packing companies was also a big challenge. Getting the foot in the door and keeping it inside was difficult. I even learnt Spanish and Italian so that I could discuss the business and challenge them in their language (especially with their technical staff). But it has always been the quality that matters the most.

“In 2007, we started Ekosistem and invested heavily (both money and time) in this new business. In times it was frustrating because money and time was never enough. Instead we should have invested in Petfor and then in Ekosistem.”

Give examples of dark moments or negative periods that your PETFOR company or you as an executive faced as part of your journey with this company.
Yuzen: “Trying to run a company with limited cash was (and sometimes still is) the most difficult part. You have a million things in your mind and no cash in your hand. You have to wait, and when you wait too long there is always someone else who does what you were supposed to do. You lose the opportunity. That is really frustrating.”

What are the key lessons about entrepreneurship and successful growth strategies you take from your company experience?

Yuzen: “I would say success is dangerous. Once you start thinking ‘I am invincible’, that is the time when you are most vulnerable and you start making wrong judgments and mistakes. However, there is no better way to learn other than failing. You keep failing and making fewer mistakes. If you are clever, you don’t repeat the same mistakes but you make new mistakes, which I think it is acceptable. The key is to not repeat the same mistakes.”

Contact us

Press center


Newsletter Sign Up